Lloyd’s of London has officially announced the site of its new EU subsidiary after Prime Minister Theresa May started the two-year formal Brexit negotiations on Wednesday.
The 329-year old specialist insurer has just revealed that it is setting up a new European insurance firm to be located in Brussels. Lloyd’s CEO Inga Beale said the plan is for the company to be ready to write business for the January 01 2019 renewal season, subject to regulatory approval.
“It is important that we are able to provide the market and customers with an effective solution that means business can carry on without interruption when the UK leaves the EU,” Beale said in a news release sent to Insurance Business.
“I am excited about the opportunities this venture will offer the market by providing that important European access efficiently,” she added.
Lloyd’s was initially tipped to choose Luxembourg after considering other locations including Ireland and Germany. According to the Press Association, the Lloyd’s franchise board chose the Belgian capital during a meeting on Tuesday and the governing council ratified the decision on Wednesday afternoon.
“Brussels met the critical elements of providing a robust regulatory framework in a central European location, and will enable Lloyd’s to continue to provide specialist underwriting expertise to our customers,” Beale said.
The Financial Times also reported that Lloyd’s picked Brussels due to the proximity to EU officials and the local regulators’ understanding of how the insurance market works.
“The selection of Brussels as the location for its European subsidiary sends out a strong signal of intent that Lloyd’s is not only committed to protecting its existing EU business, but that it has ambitions to use this move as a springboard for further advances in the EU continental market,” commented Andrew Holderness, global head of the corporate insurance group at Clyde & Co, in a comment issued to Insurance Business.
“Situated at the very heart of the EU, Brussels is a prestige location and while some of the other candidate cities looked good on paper in terms of more favourable regulation and tax treatments, Lloyd’s final decision will in part have been influenced by the capital efficiency of the proposed structure with the business being reinsured back into the London market.”
Lloyd’s will keep its headquarters in London, but CEO Inga Beale will regularly visit the Brussels hub, The Guardian reported. The new subsidiary will be similar to the market’s office in Dubai, which serves the Middle East and North Africa.
The latest reports also echoed earlier stories that Lloyd’s would relocate up to 100 jobs initially from London to Brussels. Beale has yet to make a comment on that issue.
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